No Radio Report

Tardy was many a corporation in reporting earnings for the first quarter of 1930, for most corporations had earning shrinkages to announce and the poorer the earnings, the later a report is likely to be. It remained, however, for David Sarnoff s Radio Corp. of America to dispense with any announcement whatsoever by getting permission from the Stock Exchange to omit a first-quarter statement. Exchange rules call for a periodic report of earnings, do not specify quarterly reports. But Radio Corp. was admonished not to omit a first-half report and also to issue quarterly statements thereafter. Official reason for failure to report was that the recent recapitalization and unification plan by which Radio Corp. took over General Electric and Westinghouse radio manufacturing facilities and in return gave the two utility-equipment companies control of its stock, made impossible a fair comparison between the first quarter of 1930 and the first quarter of 1929.

Skeptics who recalled that the Radio reorganization was announced considerably after the close of the first quarter, harked back to the 1929 Market Collapse and to the admittedly overproduced condition of the radio industry at the close of 1929. The fourth quarter (Christmas trade) is the big earning quarter for radio companies, including Radio Corp. In the last quarter of 1928 Radio Corp. showed a net income of $10,088,875. For the third quarter of 1929 Radio's net was more than $8,000,000, so that a $10,000,000 or $12,000,000 fourth quarter seemed not improbable. But the actual fourth quarter net was only $2,166,685. End of the year stock-taking showed a very large inventory ($31,946,798). Early in May Mr. Sarnoff said that this inventory had been practically all disposed of, but did not say at what prices or with what effect on earnings. Although Radio Corp.'s position as licenser of companies making nearly 90% of U. S. radios enables it to show large profits in boom, radio times, the same situation results in a very marked reaction in Radio Corp. profits when the industry as a whole falls upon lean times. Meanwhile, in fairness to Radio Corp., it should be added that the G. E.-Westinghouse deal has unquestionably so altered the Radio Corp. set-up that no statement of past earnings could furnish a reliable indication of future prospects.

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